Political Stability: (4)***(3) Probably the most unpredictable facet of Turkey
at this time. It remains to be seen if the instability will level out and
stabilize. A recent election has brought a new president to power Suleyman
Demirel. Consequently, the next few months are likely to prove beneficial for
political critics in Ankara as well as elsewhere but perhaps less so for those
who have been waiting patiently for a strong and decisive government to tackle
Turkey's many pending problems. The country of Turkey has a population where
more than One-Half of the people are under the age of 35, the consensus is too
bring a leader with new ideals and sense of urgency. Public Policy: (2)***(2)
Turkey will continue to be conscience of how they are perceived by NATO and the
EU. Turkey has gone through a series of events to make foreign direct investment
more opportunistic. Since the 1980`s policy makers have looked to the
Middle East for regional integration. It seems that Turkey wants to
become more active in the international market and that the hindrances to do so
are more on the external side of the equation. Turkey has entered NATO, which
was a big help; they are trying to enter the European Union. That will be
decided in the next few months. Many European countries frown upon the soaring
inflation rates and high unemployment. Direct foreign investment averaged only
US $70 million from 1980 to 1985, as foreign investors hesitated to put money
into the country. Turkey had received debt relief during the early 1980s, but
after 1984 most long-term capital came in the form of project credits or
adjustment loans arranged by the World Bank. Views of Political leaders on
Foreign Direct investment: ( Since 1963, Turkey has been pursuing the aim of
developing its relations with the European Union, then the "European
Economic Community. Prime Minister Turgut Ozal was working hard to
improve Foreign direct investment, during his second stint in office in 1983.
The current leaders are not doing as well of a job as they could be. The
elections in April may be the better avenue to pursue foreign direct investment.
Major strides have been taken to revamp conditions for entry, operations and
exit for both national and international business by completely dismantling
bureaucratic barriers and streamlining procedures based on a thorough
deregulation effort. Turkey offers many advantages to foreign investors, its
large domestic market of 57 million people desiring high quality products, a
qualified manual and technical labor force with low labor costs and high
productivity, developed utility and transportation facilities along with a
geographic and economic location close to nearby major markets of the world are
only some of the many advantages. , Turkey has been a leader in pursuing trade
and economic cooperation with the largest of the New Independent States, the
Russian Federation. It has initiated a number of programs of education and
training in the Caucasus and Central Asia, aimed at encouraging and assisting
those countries in the development of the kind of secular democratic system that
has served Turkey so well for most of this century. Major Political Events:
(5)***(4) Turks can only hope that things will stabilize, A new leader has been
elected recently. Yilmaz came to power in a three-party coalition in July 1997,
after the collapse of the previous WP-TPP coalition that had brought Turkey to
the brink of a military coup. For most of the year following his surprise
elevation to the job of Prime Minister, Yilmaz and the MP had repeatedly claimed
that the government would stay in office until 2000. On November 25, the Turkish
Grand National Assembly (GNA) voted 314 to 214 in favor of a motion of no
confidence against the government over corruption allegations, prompting Prime
Minister Mesut Yilmaz, the leader of the Motherland Party (MP), to resign. In a
separate vote, the GNA voted 315 to 214 for the dismissal of Minister of State
Gunes Taner. It is far from clear how the current political crisis will be
resolved. Degree of democracy: (4)***(4) The country must look at it`s
Criminal justice system first as to what role it encompasses. Turkeys domestic
and foreign policies have not improved its image to its neighbors. The Turkish
Criminal justice system appears to be very harsh to say the least. In a Recent
article in The (New York Times Dec.5, 1999), 33 individuals where sentenced to
death for their part in a major criminal case. Many Authors and writers are
serving lengthy sentences for writings that deter from the secular form of
government. Writers of these publications are subject to a minimum 5-year
sentence. A lawyer for one of the prisoners was quoted in the English News Wire
with the following statement, ⌠Turkey for the good and freedom of her
citizens should reform the whole judicial and political structure or the prisons
will soon be flooded with thousands who simply dare express their
opinions." Tensions with the U.S.: (2)***(2) Look for the U.S. to be a
groundbreaker in the technology aspect of future Turkey. The Truman Doctrine of
1947 marked the beginning of a new era in Turkish-American relations. Close
working ties were developed between Turkey and the US in the political,
military, economic, technical, social, and cultural fields since that time. A
new chapter in Turkish-American relations opened in the 1980s and cooperation
increased significantly. In 1991, Turkey and US elevated their cooperation to
the status of Enhanced Partnership. Since then, bilateral relations have
continued to prosper and diversify. Post-Cold War developments have clearly
shown that Turkey and the US continue to share a set of common strategic,
security and economic concerns and interests. In this connection, Turkish-US
cooperation in the field of energy and on regional issues have recently gained
special importance. Both countries have worked well together; the U.S. has and
is playing a large role for rebuilding the devastated cities after the
earthquakes this past year. Support for Government: (4)***(3) New leadership is
promising but previous instability dictates a subtle change. The general
consensus of Turkish people seem to be that they know that the Government will
never be fully embraced, and that they must accept stability over a seemingly
impossible ideal system. Turkey, not alone among nations, seems to have a
political corruption problem. Politicians often see the dispensing of patronage
(with its associated deficits and inflation) to be more important than securing
the welfare of citizens. And if April`s elections are any evidence, Turks
understand this quite well. The MHP and DSP did well because their leaders seem
like reliable guys who don`t steal, says Emre Oral, a member of The Media
Group`s executive board. That`s the only qualification you
need in Turkish politics right now. Even if their coalition does not
succeed, I know the country is going well. (The Wall Street
Journal June, 16,1999). Anti Business forces: (3)***(3) Turks will work with
people that can contribute to capital. Bureaucratic red tape, high interest
rates, high inflation, and frequently changing policies hinder private sector
business activity. Tax evasion is rampant. The government admits that around
one-quarter of total taxes go uncollected, and this figure is probably
conservative. Turkey's tax revenues equal about 22% of GNP, well below the OECD
average of 39%. Overhaul of the tax system is a top priority of the current
administration and the IMF. The World Bank is preparing a multiyear project to
assist in the effort. Turkey is a member of the World Trade Organization and
signed a free trade agreement with the European Free Trade Association (EFTA) in
1991. Turkey signed a trade agreement with Israel in March 1996 and is
negotiating free trade agreements with several Central European countries.
Threats of War Internal: (6)***(5) This is a crapshoot it will be up to the
newly found leaders to calm this internal conflict. In 15 years of fighting in
Turkey nearly 40,000 lives have been lost. These wars involve the Kurds. The
country of Turkey has a powerful military and spends 7 Billion dollars a year
fighting these wars. Turkey has intensified its persecution of the Kurds living
in the country. One could think of this war as almost a civil one, the Kurds
make up 15% of the entire country. The war in Turkey represents the largest use
of U.S. weapons anywhere in the world by non-U.S. forces. Economic Growth:
(4)***(3) Large amounts of F.D.I. will aid in building the economy. Turkey has
an economy that is a complex mix of modern industry and commerce along with
traditional village agriculture and crafts. It has a strong and rapidly growing
private sector, yet the state still plays a major role in basic industry,
banking, transport, and communication. Its most important industry≈and
largest exporter≈is textiles and clothing, which is almost entirely in
private hands. The economic situation in recent years has been marked by rapid
growth coupled with partial success in implementing structural reform measures.
Turkey's economy is a chronic under performer, but growth could accelerate to 8
per cent a year in a stable environment, fostering social stability by creating
more jobs, raising living standards and reducing the widening gap between rich
and poor. Turkey's government is faced with a long-standing problem of
controlling high deficit spending and high inflation, which has limited the
growth of the economy. Deficit spending through August 1996 amounted to some $9
billion. Given low savings rates in the country, government spending for debt
service and social benefits programs has commanded a major share of the budget,
restricting available investment funds for badly needed infrastructure
improvements. GDP≈real growth rate: 2.8% (1998 est.) Economic growth will
remain about the same in 1999; inflation should decline further, according to
where this information came from. (The Government Fact book Publication, 1998).
Inflation: (6)***(5) Figures have been erratic through the 90`s. Based on
various reports inflation has been an inherent problem all throughout the
1990`s 1n 1991 it was at 70 % and in 1992, 66%. Turkey has battled with
chronically high inflation caused by previous governments' emphasis on growth.
The situation in recent years has been marked by rapid growth coupled with
partial success in implementing structural reform measures. Inflation declined
to 70% in 1998, down from 99% in 1997. Although inflation came down 29% the
numbers are still staggering. The government somewhat unsuccessfully has been
utilizing monetary measures instead of fiscal to reduce inflation. Lowering
inflation would make the treasury's debts more manageable and bring down
interest rates, so that companies would invest more. Deregulation and
privatization would further cut government deficits, boosting productivity and
growth as well. Unemployment: (4)***(3) New opportunities regarding technology
will help. Unemployment is estimated at 6.4 percent. Unfortunately, rates are
expected to be higher by the end of next year. Due to some political uncertainty
in the earlier 1990`s many factories shut down. An excess labor supply
relative to industrial work is responsible for a 10-12 percent rate in those
areas. In more rural areas rates as high as 25 percent can be noted. Similar to
Canada in that the rate is much higher in such rural zones. Inversely, Rates are
much lower in the free-trade zones where industries are found at a much denser
rate. Government Incentives: (2)***(2) Turkey has worked hard to provide
incentives for F.D.I. will continue the same path. Turkey offers many advantages
to foreign investors: its large domestic market of 57 million people desiring
high quality products; a qualified manual and technical labor force with low
labor costs and high productivity. Since the 1980s, the Turkish government has
followed liberalized out-ward-oriented economic polices. There were rapid
changes in the economic and social structure of Turkey. Deregulation of interest
rates, the establishment of organized markets for money, foreign exchange,
stocks and securities, the liberalization of capital movements, and reforms in
the banking sector, were just some of the changes. The most significant
provisions foreign investors are subject to are:  Approval obligation
 Foreign participation is permitted up to 100%  Forms of
business entities can be limited liability or corporation  Employment of
expatriate staff is permitted  Equal treatment is the basis for foreign
and domestic investors. The Government of Turkey annually issues a list of
investment incentives. In order to take advantage of such incentives, a special
"Incentive Certificate" has to be obtained together with the
investment approval from UT. According to the current incentive regime, a
minimum investment of 6 billion TL is necessary for priority regions and 12
billion TL for other regions. Incentives for 1996 are as follows:  Tax
Allowances (30-100% according to location)  Refund of VAT+10% for
locally purchased machinery  Customs exemption on imported machinery
 Customs expenditure on raw materials (in accordance with the
specifications mentioned in the regime).  VAT Deferral on Imported
Machinery and Equipment.  Allocation of land  Discounts on
electricity charges Fiscal policies: (4)***(3) Government looks promising to
make this a focus of reform. Turkey`s enforced commitment by the IMF to
tight fiscal policy next year is the key condition for Turkey to secure a stand-
by accord with the International Monetary Fund. But some bankers believe the
Fund may support Turkey with a stand-by loan even if Ankara fails to draw up a
fully satisfactory budget for 2000 in view of the enormous damage caused by
August's earthquake. Turkey has had difficulty putting together a 2000 budget
and the talks with International Monetary fund are being delayed. The task of
computing the costs of the earthquake is going to dictate when decisions will be
made regarding loans from the IMF. The IMF pledged financial resources in July
if Turkey makes reform progress. The government has moved quickly on structural
reforms, pushing banking, pension, and international arbitration laws through
parliament. But government sources say Turkey`s lack of commitment to a
tight fiscal policy for 2000 have raised concerns about the fate of the talks.
(WASHINGTON, Sept 09,Reuters) Foreign Debt: (4)***(4) Funds will continue to be
needed. Tansu Ciller swept into the Prime Minister's office in Ankara. She was
confident and full of ideas, epitomizing a new generation of politicians whom,
many hoped, would transform Turkey into a key player in Europe and Asia.
Ciller's policies were intended to restore faith in Turkey`s public
finances, but continued government borrowing and her inattention to the $66
billion foreign debt undermined lenders' confidence. Both Moody's and Standard
& Poor's, the influential U.S. rating agencies, downgraded Turkey`s
credit standing, which further scared off potential private investment. Ciller
inherited an economy overheated by inflation and a government structure groaning
under the weight of Red tape and beurocrocy. Infrastructure: (5)***(4) The slow
process begins to make Turkey a fluid country again. The government is giving
special priority to major infrastructure projects, especially in the transport
sector. Although most state investments were put on hold in 1994, the government
has resumed planning and construction of many airport, port, and highway
ventures, in large part through project finance with private capital. As of
1987, Turkey had 106 usable airports, 62 of which had paved runways. Turkish
Airlines (Turk Hava Yollari--THY), plagued by a poor safety record in the 1970s,
fought its way back to profitability during the 1980s and was considered a
candidate for privatization Some 20 undertakings involving project finance,
worth about $14 billion, have been proposed or are under development. The
government planned to build 3,000 kilometers of highways by the year 2000 and to
upgrade existing roads. The Ozal administration began a major highway project
that, when completed, would give Turkey highways that traversed the country,
making it possible to handle increased levels of freight between Europe and the
Middle East. This project, along with the second bridge across the Bosporus,
would form 3,600 kilometers of a Trans-European motorway, a 10,000-kilometer
route from Gdansk on the Baltic Sea to cities on the Caspian Sea and the Persian
Gulf. The recent earthquakes have destroyed many entities of travel; it will be
a long recovery period before the Country rebuilds from the disastrous 1999.
Remittance of Earnings: (2)***(2.5) must remain stable in order to remain an
incentive for F.D.I. Turkey has created a Foreign Investment Directorate (FID)
has passed legislation to promote and encourage foreign much needed investment,
especially in technological and know-how sectors, job creation, export
promotion, tourism and capital investment. If investors go through the
procedures of starting a venture, a good experience is likely. Turkey has no set
rules for reinvesting capital unless it is stipulated in the venture. The
planning stage is of crucial importance, in that you should clarify and obtain
all the necessary documentation. Otherwise, subsequent rectification is not
possible and an investment without permission will create problems for taxation
and the repatriation of capital. The legislation, which regulates the investment
establishes the ground rules for the remittance of foreign capital and
simplifies this process to further Turkey`s open-door policy with the
world markets. Per capita income: (4)***(3) Better jobs will be available in the
future partially due to F.D.I. The year ending 1998 yielded a per capita income
of, $6,600 U.S. dollars. This number and chart come from the (CIA fact book
1999.) GDP≈composition by sector: agriculture: 14.4% industry: 28.7%
services: 56.9% (1998) Competitive forces: (3)***(3) They continue to lack in
many areas, other than basic industries. There is little competition in many
areas of technology, however there is heavy competition in agriculture, mining
and other already situated and figured out operations. Turkey welcomes
investment that will bring them to the 21st century. Education: (3)***(2) While
education is reasonably funded and supported, much like Mexico a Technology boom
or avenue must be created to train future candidates for jobs that will assist
F.D.I. There are general, vocational and technical education institutions which
provide a three-year education for primary school graduates and which supply
students with general knowledge and prepare them for either higher education or
a profession. High Schools are not generalized like they are in the U.S., a High
school serves a particular function. It is much more difficult to find out what
you like. Once a student becomes 15, they are expected to go into a form of
schooling geared to a career that they wish to pursue. A sort of mission
statement for the education in Turkey looks like this. Being one where all
individuals of the state are gathered together as an inseparable whole, united
in national consciousness and thinking, trained to think along scientific lines
with intellectually broadened views on world affairs, and to be productive happy
individuals, who through their skills contribute to the prosperity of society
and are instrumental in making the Turkish nation a creative and distinguished
member of the modern world. (Turkish Education Embassy, 1998) Although the above
statement gives us that warm fuzzy feeling we learn to convey in marketing
class, the sad truth is that education is somewhat near the bottom of priority
in areas of funding. It could be said that a student`s true calling could easily
be lost in the shuffle of severely tunnel-vision type (subject wise) schooling.
Crime: (4)***(3) Viewed political crime must be separated from real crime. As
discussed earlier in the Democracy section, Turkey has more than 10,000
political prisoners. They are trade unionists, human rights activists,
democrats, artists, writers, revolutionaries, Kurdish patriots, socialists, etc.
The number of inmates has doubled from 1984 to 1991. This rise is primarily due
to the above mentioned prisoners. Their life in prison is a permanent struggle
for minimal human rights. Very often they have to face brutal attacks by the
fascist forces of the Turkish State. There are many reports of torture and
inhumane activities amongst prisons. There is much discussion on the horrific
conditions of jails and detention centers. Once again this is insufficiently
funded area of Turkey. Human rights organizations for years have alleged that
Turkish security forces abuse detainees with electric shocks, beatings, death
threats and other forms of abuse. ABCNEWS, John Cochran asked Turkish President
Suleyman Demirel, about allegations of human rights abuses at a news conference
with President Clinton. ⌠It is impossible to say that there is no torture
in Turkey; there is torture. But torture is not state policy, Demirel said.
⌠ (ABC NEWS DEC11 1999). However, this discussion is two-fold, while
procedures of the Criminal justice system are harsh to say the least, the crime
rate is lower than most other Middle Eastern, and some Western European
countries. Labor force: (3)***(3) A somewhat strong suit in Turkeys regime,
Which if nurtured could be a key to future success upon entering the EU. 22.7
million (April 1998) note: about 1.5 million Turks work abroad (1994) Labor
force≈by occupation: agriculture 42.5%, services 34.5%, and industry 23%
(1996). The human resource is fairly abundant in Turkey and with a younger
population the potential is available to investors that wish to enter a business
that needs people. Many people feel that their jobs are dead end, while some
accept it as a way of life, others are seeking jobs more enlightening. Ethnic
Conflict: (6)***(5) An inherent problem for a long time will see. As stated
earlier this is a huge problem with the Turks. The Kurds and Turks have been
battling for years. The tremendous Armies on both sides lead to a very unstable
cohesion among all people living Turkey. Although there are signs that this
relationship may actually be improving. In 1991 turkey lifted a ban on which
Kurdish music, language, dress, associations. This occurred following the gulf
war. The Kurdish language still may not be taught in schools or used by
merchants on storefronts or in advertising. In fact is illegal in Turkey for
parents to give their children a Kurdish name. (Atlantic Economic Journal,
Dec.11, 1999). Riots Terrorism: (6)***(4) I predict it will diminish however
strikes fear in many Turk`s, once again new leadership shows promise. Turkey is
one of the several democratic countries who face severe terrorism problems.
Terrorism started to make the public restless while disorder in political area
increases. Istanbul is the new target of terrorists in causing chaos. People
stopped shopping from markets and hypermarkets, interest in collective
activities like football matches and concerts dropped. Anxiety about terrorism
is a threat for tourism and entertainment sectors. Many involve either the
outlawed Kurdistan Workers' Party (PKK), which intensified its campaign for an
independent state in the southeastern part of Turkey or ultra-Islamist groups
that are based mainly in Germany and Iran. Ethnic Conflict: (4)***(3) New
leadership will curb war with the Kurds. The Turks are a highly composite ethnic
mixture, mostly speak Turkish; there is a sizable Kurdish minority. The country
is almost entirely Muslim, with small groups of Orthodox Christians and other
religions. At 25 million, the Kurds are the largest ethnic group in the world
without their own state. With a similar language, religion, and culture, the
Kurds have lived for thousands of years in an area that is now part of Turkey,
Iraq, Iran, Syria, and the former Soviet Union. Today, the 15 million Kurds who
live in Turkey constitute about 25 percent of that country's population. Until
1991, the Turkish government banned Kurdish music, language, dress,
associations, and newspapers. The Kurdish language still may not be taught in
schools or used by merchants on storefronts or in advertising. It is illegal in
Turkey for parents to give their child a Kurdish name. Death squads have killed
more than a dozen Kurdish journalists, as well as numerous politicians and
activists. Despite 15 years of fighting, Turkey today has no POWs; most rebels,
according to the government, have been "captured dead." But there are
large numbers of civilian Kurds in Turkish prisons where, according to
organizations like Amnesty International, the use of torture is routine. In the
last decade the Turkish army has leveled, burned, or forcibly evacuated more
than 3,000 Kurdish villages. Social cohesion: (2.5)***(3.0) As technology,
increases social classes will diversify. In general amongst the Turks, the
people get along well. According to a news article on (CNN) date unknown, The
Turks gathered together during the earthquakes and worked together in an
unselfish giving manner. The emphasis of care was being placed on woman and
children. In fact hundreds of thousands of people came from unaffected areas of
Turkey to offer help in any way needed. Quality of life: (4.0)***(4.0) difficult
slow rebuilding process. Turkey has been devastated by earthquakes, which have
crushed the hopes and dreams of many. Life in turkey for many is a rebuilding
process that may go on for over a decade to just make life once again stable.
Turks for the most part enjoy a simple life, The Country as a whole sees itself
as a large part of a future economic boom, but the Turks rely on tradition and
tight families as a positive indicator for quality of life. Family stability:
(4)***(3) Although some bizarre acts, overall stable environments. New
politicians are eradicating some informal mechanisms that humiliate women.
Turkey practices a way of life similar to other European countries. The divorce
rate amongst couples ranges from 20% - 35%. A man can get a divorce very easily,
however a woman must go through a long procedure, in which she must prove a
valid case that allows her to proceed through the tight restrictions of divorce.
Women as a whole are not given the same rights as seen in other countries. In a
bizarre report, (The Dallas Morning News, 01-11-1998), Women can be subjected to
a virginity test where if they fail, are shunned from society and face many
family problems. In rural areas and urban neighborhoods populated by migrants
from the countryside, parents and future husbands often take young women to be
tested before their marriage, and sometimes if they are suspected of having had
premarital relations. Turkish law makes no reference to the practice of
virginity tests, but many parents consider them a reasonable way to control
their daughters. There is pressure on all family members to not bring dishonor
to the family name at any cost. Bribery: (4)***(3) F.D.I. will not except
bribery as a form of business. As in every other aspect of Turkish political
life, the issue of corruption occupies a central role in the struggle between
secularism and political Islam in Turkey. Bribery is more of problem than
thought, In the wake of the August 17 earthquake and the revelation of the
shoddy construction that contributed to the loss of lives and the official
negligence that permitted it. Bribery in the business environment is similar to
that of Russia in some areas like the trade zones where bribes are masked as
tariffs or consulting fees.